UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

H&R BLOCK, INC.

(Exact name of registrant as specified in its charter)

Missouri		1-6089		44-0607856
(State or other jurisdiction of		(Commission		(I.R.S. Employer
incorporation)		File Number)		Identification No.)

One H&R Block Way, Kansas City, MO 64105
(Address of principal executive office)(Zip Code)

(816) 854-3000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 1.01 Entry into a Material Definitive Agreement.

     On January 8, 2008, H&R Block, Inc. (the “Company”) and Block Financial LLC (“Block Financial”) entered into an Underwriting Agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and HSBC Securities (USA) Inc. in connection with the issuance and sale by Block Financial of up to $600,000,000 of principal amount of Block Financial’s 7.875% Notes due 2013 (the “Notes”), which are fully and unconditionally guaranteed by the Company pursuant to guarantees (the “Guarantee”) endorsed on the Notes. The closing of the sale of the Notes and the Guarantee occurred on January 11, 2008. The Officers’ Certificate establishing the terms of the Notes is filed as Exhibit 4.1 and the form of the Notes and Guarantee is filed as Exhibit 4.2.

Item 8.01 Other Events.

     The Company is filing certain exhibits to its Shelf Registration Statement on Form S-3 (No. 333-118020) under Item 9.01 hereof in connection with the completion of the public offering of the Notes on January 11, 2008.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

	1.1		Underwriting Agreement dated as of January 8, 2008 among Block Financial LLC, H&R Block, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and HSBC Securities (USA) Inc.
	2.1		Certificate of Conversion of Block Financial LLC
	3.1		Certificate of Formation of Block Financial LLC
	3.2		Operating Agreement of Block Financial LLC
	4.1		Officers’ Certificate of Block Financial LLC establishing the terms of the 7.875% Notes due 2013
	4.2		Form of 7.875% Notes due 2013
	5.1		Opinion of Stinson Morrison Hecker LLP
	12.1		Statement regarding Computation of Ratio of Earnings to Fixed Charges for H&R Block, Inc.
	12.2		Statement regarding Computation of Ratio of Earnings to Fixed Charges for Block Financial LLC
	23.1		Consent of Stinson Morrison Hecker LLP (included in Exhibit 5.1)

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 11, 2008

Index to Exhibits

Exhibit No.		Description
1.1		Underwriting Agreement dated as of January 8, 2008 among Block Financial LLC, H&R Block, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and HSBC Securities (USA) Inc.
2.1		Certificate of Conversion of Block Financial LLC
3.1		Certificate of Formation of Block Financial LLC
3.2		Operating Agreement of Block Financial LLC
4.1		Officers’ Certificate of Block Financial LLC establishing the terms of the 7.875% Notes due 2013
4.2		Form of 7.875% Notes due 2013
5.1		Opinion of Stinson Morrison Hecker LLP
12.1		Statement regarding Computation of Ratio of Earnings to Fixed Charges for H&R Block, Inc.
12.2		Statement regarding Computation of Ratio of Earnings to Fixed Charges for Block Financial LLC
23.1		Consent of Stinson Morrison Hecker LLP (included in Exhibit 5.1)

EXHIBIT 1.1

BLOCK FINANCIAL LLC

(a Delaware limited liability company)

$600,000,000
7.875% Notes due 2013

UNDERWRITING AGREEMENT

Dated: January 8, 2008

BLOCK FINANCIAL LLC

(a Delaware limited liability company)

UNDERWRITING AGREEMENT

January 8, 2008

Merrill Lynch, Pierce, Fenner & Smith
          Incorporated
4 World Financial Center
New York, New York 10080

J.P. Morgan Securities Inc.
277 Park Avenue
New York, New York 10172

HSBC Securities (USA) Inc.  
452 Fifth Avenue, 3^rd Floor  
New York,  New York 10018

Ladies and Gentlemen:

     Block Financial LLC, a Delaware limited liability company (the “Company”), confirms its agreement with the several Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), with respect to the issue and sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective principal amounts set forth in said Schedule A of $600,000,000 aggregate principal amount of the Company’s Notes due 2013 (the “Securities”). The Securities are to be issued pursuant to an indenture (the “Indenture”) dated October 20, 1997, among H&R Block, Inc., a Missouri corporation (the “Parent Guarantor”), the Company and Bankers Trust Company, as trustee, as supplemented by the First Supplemental Indenture, dated April 18, 2000, among the Company, the Parent Guarantor, Bankers Trust Company and The Bank of New York, as separate trustee (as may be further supplemented, amended or modified). The term “Indenture,” as used herein, includes the Officer’s Certificate (as defined in the Indenture) establishing the form and terms of the Securities pursuant to Sections 2.01 and 2.03 of the Indenture. The Securities will be fully and unconditionally guaranteed by the Parent Guarantor pursuant to guarantees (the “Guarantee”) endorsed on the securities under the terms of the Indenture.

     The Company and the Parent Guarantor understand that the Underwriters propose to make a public offering of the Securities as soon as the Underwriters deem advisable after this Agreement has been executed and delivered.

     The Company and the Parent Guarantor have filed with the Securities and Exchange Commission (the “Commission”) a shelf registration statement on Form S-3 (No. 333-118020-01), including the related preliminary prospectus or prospectuses, which registration statement has been declared effective by the Commission pursuant to the rules and regulations (the “1933 Act Regulations”) under the Securities Act of 1933, as amended (the “1933 Act”). Such registration statement covers the registration of the Securities under the 1933 Act. Promptly after execution and delivery of this Agreement, the Company and the Parent Guarantor will prepare and file a prospectus in accordance with the provisions of Rule 430B (“Rule 430B”) of the 1933 Act Regulations and paragraph (b) of Rule 424 (“Rule 424(b)”) of the 1933 Act Regulations.

Any information included in such prospectus that was omitted from such registration statement at the time it became effective but that is deemed to be part of and included in such registration statement pursuant to Rule 430B is referred to as “Rule 430B Information.” Each prospectus used in connection with the offering of the Securities that omitted Rule 430B Information is herein called a “preliminary prospectus.” Such registration statement, at any given time, including the amendments thereto to such time, the exhibits and any schedules thereto at such time, the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at such time and the documents otherwise deemed to be a part thereof or included therein by 1933 Act Regulations, is herein called the “Registration Statement.” The Registration Statement at the time it originally became effective is herein called the “Original Registration Statement.” The final prospectus in the form first furnished to the Underwriters for use in connection with the offering of the Securities, including the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time of the execution of this Agreement and any preliminary prospectuses that form a part thereof, is herein called the “Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).

     All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in or otherwise deemed by 1933 Act Regulations to be a part of or included in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934 (the “1934 Act”) which is incorporated by reference in or otherwise deemed by 1933 Act Regulations to be a part of or included in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be.

     SECTION 1. Representations and Warranties.

     (a) Representations and Warranties by the Company and the Parent Guarantor. The Company and the Parent Guarantor jointly and severally represent and warrant to each Underwriter as of the date hereof, the Applicable Time referred to in Section 1(a)(i) hereof and as of the Closing Time referred to in Section 2(b) hereof, and agrees with each Underwriter, as follows:

     (i) Form S-3. (A) At the time of the filing of the Original Registration Statement, (B) at the time the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 and 15(d) of the 1934 Act or form of prospectus), (C) at the time the Company and the Parent Guarantor or any person acting on their behalf (within the meaning, for this clause only, of Rule 163(c) of the 1933 Act Regulation) made any offer relating to the Securities in reliance on the exemption of Rule 163 of the 1933 Act Regulation and (D) at the date hereof, the Company and the Parent Guarantor meet the requirements for use of Form S-3 under the 1933 Act. Each of the Company and the Parent Guarantor was and is, as of the times specified in Clauses B, C and D of the preceding sentence, a “well-known seasoned issuer” as defined in Rule 405 of the 1933 Act Regulations (“Rule 405”), including not having been and not being an “ineligible issuer” as defined in Rule 405.

     (ii) Registration Statement, Prospectus and Disclosure at Time of Sale. The Original Registration Statement has been declared effective by the Commission, and any post-effective amendment thereto also became effective. No stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have

been instituted or are pending or, to the knowledge of the Company and the Parent Guarantor, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with.

     At the respective times the Original Registration Statement and each amendment thereto became effective, at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations and at the Closing Time, the Registration Statement complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the “1939 Act Regulations”), and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

     Neither the Prospectus nor any amendments or supplements thereto, at the time the Prospectus or any such amendment or supplement was issued and at the Closing Time, included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

     Each preliminary prospectus (including the prospectus or prospectuses filed as part of the Original Registration Statement or any amendment thereto) complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

     As of the Applicable Time, neither (x) the Issuer General Use Free Writing Prospectus (as defined below) issued at or prior to the Applicable Time (as defined below) and the Statutory Prospectus (as defined below), all considered together (collectively, the “General Disclosure Package”), nor (y) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

     As of the time of the filing of the Final Term Sheet, the General Disclosure Package, when considered together with the Final Term Sheet (as defined in Section 3(b)), will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

     As used in this subsection and elsewhere in this Agreement:

     “Applicable Time” means 4:45 pm (Eastern time) on January 8, 2008 or such other time as agreed by the Company and Merrill Lynch.

     “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Securities that (i) is required to be filed with the Commission by the Company or the Parent Guarantor, (ii) is a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s or the Parent Guarantor’s records pursuant to Rule 433(g).

     “Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being specified in Schedule C hereto.

     “Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

     “Statutory Prospectus” as of any time means the prospectus relating to the Securities that is included in the Registration Statement immediately prior to that time, including any document incorporated by reference therein and any preliminary or other prospectus deemed to be a part thereof.

     Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Securities or until any earlier date that the issuer notified or notifies Merrill Lynch as described in Section 3(e), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified.

     The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Merrill Lynch expressly for use therein.

     (iii) Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”), and, when read together with the other information in the Prospectus, (a) at the time the Original Registration Statement became effective, (b) at the earlier of time the Prospectus was first used and the date and time of the first contract of sale of Securities in this offering and (c) at the Closing Time, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

     (iv) Independent Accountants. Deloitte and Touche LLP is (and KPMG LLP, who certified the financial statements and supporting schedules included in the Registration Statement was, when serving as the Parent Guarantor’s and its subsidiaries’ independent auditors) independent public accountants as required by the 1933 Act and the 1933 Act Regulations.

     (v) Financial Statements. The financial statements included in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly in all material respects the financial position of the Parent Guarantor and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Parent Guarantor and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved. The supporting schedules, if any, present fairly in all material respects in accordance with GAAP the information required to be stated therein. The selected financial data included in the Prospectus present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that of the financial statements incorporated by reference into the Registration Statement. All disclosures contained in the Registration Statement, the General Disclosure Package or the

Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G under the 1934 Act and Item 10 of Regulation S-K of the 1933 Act Regulations, to the extent applicable.

     (vi) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change or prospective material adverse change in the financial condition, the earnings or the business affairs of the Company, the Parent Guarantor and their subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), (B) there have been no transactions entered into by the Company, the Parent Guarantor or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company, the Parent Guarantor and its subsidiaries considered as one enterprise, and (C)  there has been no dividend or distribution of any kind declared, paid or made by the Company or the Parent Guarantor on any class of their capital stock or other equity securities.

     (vii) Good Standing of the Company and the Parent Guarantor. The Company has been duly organized and is validly existing as a limited liability company in good standing under the laws of the state of Delaware and the Parent Guarantor has been duly organized and is validly existing as a corporation in good standing under the laws of the state of Missouri and each of them has the limited liability company or corporate power and authority, as applicable, to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement.

     (viii) Good Standing of Subsidiaries. Each “significant subsidiary” of the Company and the Parent Guarantor (as such term is defined in Rule 1-02 of Regulation S-X) (each a “Subsidiary” and, collectively, the “Subsidiaries”) has been duly organized and is validly existing as a limited liability company, corporation, or federal savings bank, as applicable, in good standing under the laws of the jurisdiction of its organization, has limited liability company or corporate power and authority, as applicable, to own, lease and operate its properties and to conduct its business as described in the Prospectus; except as otherwise disclosed in the Registration Statement, all of the issued and outstanding capital stock or limited liability company interests, as applicable, of each such Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable, as applicable, and is owned by the Parent Guarantor, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock or limited liability company interests, as applicable, of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. The only subsidiaries of the Parent Guarantor and the Company are the subsidiaries listed on Schedule B hereto.

     (ix) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company and the Parent Guarantor.

     (x) Authorization of the Indenture. The Indenture has been duly authorized by the Company and the Parent Guarantor and duly qualified under the 1939 Act and, when duly executed and delivered by the Company, the Parent Guarantor and the Trustee, will constitute a valid and binding agreement of the Company and the Parent Guarantor, enforceable against the Company and the Parent Guarantor in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

     (xi) Authorization of the Securities. (A) The Securities have been duly authorized and, at the Closing Time, will have been duly executed by the Company and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture; (B) The Guarantees have been duly authorized and, at the Closing Time, will have been duly executed by the Parent Guarantor and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Parent Guarantor, enforceable against the Parent Guarantor in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture.

     (xii) Description of the Securities and the Indenture. The Securities and the Indenture will conform in all material respects to the respective statements relating thereto contained in the Prospectus and will be in substantially the respective forms filed or incorporated by reference, as the case may be, as exhibits to the Registration Statement.

     (xiii) Absence of Defaults and Conflicts. Neither the Company, the Parent Guarantor nor any of their subsidiaries is in violation of its operating agreement, charter or by-laws, as applicable, or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company, the Parent Guarantor or any of their subsidiaries is a party or by which they or any of them may be bound, or to which any of the property or assets of the Company, the Parent Guarantor or any subsidiary is subject (collectively, “Agreements and Instruments”) except for such defaults that would not result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement, the Indenture and the Securities and the consummation of the transactions contemplated herein and in the Registration Statement (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption “Use of Proceeds”) and compliance by the Company and the Parent Guarantor with their respective obligations hereunder and under the Indenture and the Securities have been duly authorized by all necessary corporate or limited liability company action, as applicable, and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, the Parent Guarantor or any subsidiary pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not result in a Material Adverse Effect), nor will such action result in any violation of the provisions of (i) the operating agreement, charter or by-laws, as applicable, of the Company, the Parent Guarantor or any subsidiary or (ii) any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company, the Parent Guarantor or any subsidiary or any of their assets, properties or operations, except, with respect to section (ii) above, for such violations that would not result in a Material Adverse Effect. As used

herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company, the Parent Guarantor or any subsidiary.

     (xiv) Legal Proceedings. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Parent Guarantor or any of its subsidiaries is or may be a party or to which any property of the Parent Guarantor or any of its subsidiaries is or may be the subject as to which there is a reasonable possibility of an adverse determination and that if determined adversely to the Parent Guarantor or any of its subsidiaries, would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; except as described in the Registration Statement, the General Disclosure Package and the Prospectus, to the knowledge of the Company and the Parent Guarantor, no such investigations, actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or threatened by others; and (i) there are no current or pending legal, governmental or regulatory actions, suits or proceedings that are required under the Securities Act to be described in the Prospectus that are not so described and (ii) there are no contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement or described in the Registration Statement, the General Disclosure Package or the Prospectus that are not so filed or described, except for those documents relating to the issuance of a particular series of Securities, which will be filed on Form 8-K in connection with the closing of the issuance of such Securities.

     (xv) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company or the Parent Guarantor of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement or for the due execution, delivery or performance of the Indenture by the Company or the Parent Guarantor, except such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations or state securities laws and except for the qualification of the Indenture under the 1939 Act.

     (xvi) Licenses and Permits. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, the Parent Guarantor and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Registration Statement, the General Disclosure Package and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, result in a Material Adverse Effect.

     (xvii) Investment Company Act. Neither the Company nor the Parent Guarantor is required, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be required, to register as, an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”).

     (xviii) Accounting Controls and Disclosure Controls. The Parent Guarantor maintains a system of internal accounting controls sufficient to provide reasonable assurances that (1) transactions are executed in accordance with management’s general or specific authorization; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific authorization; and (4) the recorded accountability

for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. As disclosed in the quarterly reports on Form 10-Q for the quarters ended July 31, 2007 and October 31, 2007 as filed by the Parent Guarantor and incorporated by reference in the Prospectus, since the end of the Parent Guarantor’s most recent audited fiscal year there has been (I) no material weakness in the Parent Guarantor’s internal control over financial reporting (whether or not remediated) except that, with respect to the period since October 31, 2007, the representation contained in this section (xviii)(I) is limited to the knowledge of the Company and (II) no change in the Parent Guarantor’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Parent Guarantor’s internal control over financial reporting.

     The Parent Guarantor and its consolidated subsidiaries employ disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Parent Guarantor in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Parent Guarantor’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure.

     (xix) Compliance with the Sarbanes-Oxley Act. The Parent Guarantor or any of the Parent Guarantor’s directors or officers, in their capacities as such, are in compliance in all material respects with the applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications.

     (b) Officer’s Certificates. Any certificate signed by any officer of the Company, the Parent Guarantor or any of its subsidiaries delivered to the Underwriters or to counsel for the Underwriters shall be deemed a representation and warranty by the Company and the Parent Guarantor to each Underwriter as to the matters covered thereby.

     SECTION 2. Sale and Delivery to Underwriters; Closing.

     (a) Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the price set forth in Schedule A, the aggregate principal amount of Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional principal amount of Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof.

     (b) Payment. Payment of the purchase price for, and delivery of certificates for, the Securities shall be made at the offices of Simpson Thacher & Bartlett LLP, or at such other place as shall be agreed upon by the Underwriters and the Company, at 9:00 A.M. (Eastern time) on the third business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Underwriters and the Company (such time and date of payment and delivery being herein called “Closing Time”).

     Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Underwriters for the respective accounts of the Underwriters of certificates for the Securities to be purchased by them. It is understood that each Underwriter has authorized the Underwriters, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Securities which it has agreed to purchase. Merrill Lynch, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment

of the purchase price for the Securities to be purchased by any Underwriter whose funds have not been received by the Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder.

     (c) Denominations; Registration. Certificates for the Securities shall be in such denominations ($2,000 or integral multiples thereof) and registered in such names as the Underwriters may request in writing at least one full business day before the Closing Time. The Securities, which may be in temporary form, will be made available for examination and packaging by the Underwriters in The City of New York not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time.

     SECTION 3. Covenants of the Company and Parent Guarantor. The Company and, to the extent expressly referred to in the paragraphs below, the Parent Guarantor jointly and severally covenant with each Underwriter as follows:

     (a) Compliance with Securities Regulations and Commission Requests; Payment of Filing Fees. The Company and the Parent Guarantor, subject to Section 3(b), will comply with the requirements of Rule 430B and will notify the Underwriters promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement or new registration statement relating to the Securities shall become effective, or any supplement to the Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or the filing of a new registration statement or any amendment or supplement to the Prospectus or any document incorporated by reference therein or otherwise deemed to be a part thereof or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or such new registration statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement and (v) if the Company or the Parent Guarantor becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities. The Company and the Parent Guarantor will effect the filings required under Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company and the Parent Guarantor will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.

     (b) Filing of Amendments and Exchange Act Documents; Preparation of Final Term Sheet. The Company and the Parent Guarantor will give the Underwriters notice of its intention to file or prepare any amendment to the Registration Statement or new registration statement relating to the Securities or any amendment, supplement or revision to either any preliminary prospectus (including any prospectus included in the Original Registration Statement or amendment thereto at the time it became effective) or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, and the Company and the Parent Guarantor will furnish the Underwriters with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Underwriters or counsel for the Underwriters shall reasonably object. The Company and the Parent Guarantor have given the Underwriters notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company and the Parent Guarantor will give the Underwriters notice of its intention to make any such filing from the Applicable Time to the Closing Time and will furnish the Underwriters with copies of any such documents a reasonable amount of time prior to such proposed filing and will not file or use any such document to which the Underwriters or counsel for the Underwriters shall reasonably object. The Company and the Parent Guarantor will prepare a final term sheet, a copy of which is attached hereto as Schedule C (the “Final Term Sheet”), reflecting the final terms of

the Securities, in form and substance satisfactory to the Underwriters, and shall file such Final Term Sheet as an “issuer free writing prospectus” pursuant to Rule 433 prior to the close of business two business days after the date hereof; provided that the Company shall furnish the Underwriters with copies of any such Final Term Sheet a reasonable amount of time prior to such proposed filing and will not use or file any such document to which the Underwriters or counsel to the Underwriters shall object.

     (c) Delivery of Prospectuses. The Company and the Parent Guarantor have delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company and the Parent Guarantor hereby consent to the use of such copies for purposes permitted by the 1933 Act. The Company and the Parent Guarantor will furnish to each Underwriter, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

     (d) Continued Compliance with Securities Laws. The Company and the Parent Guarantor will comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations and the 1939 Act and the 1939 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company and the Parent Guarantor, to amend the Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not include any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or to file a new registration statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company and the Parent Guarantor will promptly prepare and file with the Commission, subject to Section 3(b), such amendment, supplement or new registration statement as may be necessary to correct such statement or omission or to comply with such requirements, the Company and the Parent Guarantor will use their best efforts to have such amendment or new registration statement declared effective as soon as practicable (if it is not an automatic shelf registration statement with respect to the Securities) and the Company and the Parent Guarantor will furnish to the Underwriters such number of copies of such amendment, supplement or new registration statement as the Underwriters may reasonably request. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement (or any other registration statement relating to the Securities) or the Statutory Prospectus or any preliminary prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company and the Parent Guarantor will promptly notify Merrill Lynch and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

     (e) Blue Sky Qualifications. The Company and the Parent Guarantor will use their reasonable best efforts, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions as the Underwriters may reasonably designate and to maintain such qualifications in effect for so long as required for distribution of the securities; provided, however, that the Company and the Parent Guarantor shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or subject itself to taxation in respect of doing business in any

jurisdiction in which it is not otherwise so subject. The Company and the Parent Guarantor will also supply the Underwriters with such information as is necessary for the determination of the legality of the Securities for investment under the laws of such jurisdictions as the Underwriters may reasonably request.

     (f) Rule 158. The Parent Guarantor will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

     (g) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectus under “Use of Proceeds.”

     (h) Clear Market. During the period from the date hereof through and including the Closing Time, the Company and the Parent Guarantor will not, without the prior written consent of the Underwriters, offer, sell contract to sell or otherwise dispose of any debt securities issued or guaranteed by the Company or the Parent Guarantor and having a tenor of more than one year (other than the Securities).

     (i) Reporting Requirements. The Parent Guarantor, during the period when the Prospectus is required to be delivered under the 1933 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations.

     (j) Issuer Free Writing Prospectuses. The Company and the Parent Guarantor represent and agree that, unless they obtain the prior consent of the Representative, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Company, the Parent Guarantor and the Representative, it has not made and will not make any offer relating to the Securities that would constitute an “issuer free writing prospectus,” as defined in Rule 433, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission; provided, however, that prior to the preparation of the Final Term Sheet in accordance with Section 3(b), the Underwriters are authorized to use the information with respect to the final terms of the Securities in communications conveying information relating to the offering to investors. Any such free writing prospectus consented to by the Company, the Parent Guarantor and the Representative is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company and the Parent Guarantor represent that they have treated or agree that they will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.

     SECTION 4. Payment of Expenses.

     (a) Expenses. The Company and the Parent Guarantor jointly and severally agree to pay all expenses incident to the performance of their obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this Agreement, any Agreement among Underwriters, the Indenture and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, (iv) the fees and disbursements of the Company’s and the Parent Guarantor’s counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to the Underwriters of copies of each preliminary prospectus, any Permitted Free Writing Prospectus and of the Prospectus and any amendments or supplements thereto and any costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (vii) the

preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities, (ix) the costs and expenses of the Company and the Parent Guarantor relating to investor presentations on any “road show” undertaken in connection with the marketing of the Securities, including without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel and lodging expenses of the representatives and officers of the Company and the Parent Guarantor and any such consultants, and the cost of aircraft and other transportation chartered in connection with the road show and (x) any fees payable in connection with the rating of the Securities, and (xi) the costs and expenses (including without limitation any damages or other amounts payable in connection with legal or contractual liability) associated with the reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation contained in the fifth paragraph of Section 1(a)(ii).

     (b) Termination of Agreement. If this Agreement is terminated by the Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company and the Parent Guarantor jointly and severally shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters.

     SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company and the Parent Guarantor contained in Section 1 hereof or in certificates of any officer of the Company and the Parent Guarantor or any subsidiary of the Company and the Parent Guarantor delivered pursuant to the provisions hereof, to the performance by the Company and the Parent Guarantor of its covenants and other obligations hereunder, and to the following further conditions:

     (a) Effectiveness of Registration Statement; Filing of Prospectus; Payment of Filing Fee. The Registration Statement has become effective and at Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Underwriters. A prospectus containing the Rule 430B Information shall have been filed with the Commission in the manner and within the time period required by Rule 424(b) without reliance on Rule 424(b)(8) (or a post-effective amendment providing such information shall have been filed and become effective in accordance with the requirements of Rule 430B).

     (b) Opinion of Counsel for Company and the Parent Guarantor. At Closing Time, the Underwriters shall have received the favorable opinion, dated as of Closing Time, of Stinson Morrison Hecker LLP, counsel for the Company and the Parent Guarantor in form and substance reasonably satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit A hereto.

     (c) Opinion of Counsel for Underwriters. At Closing Time, the Underwriters shall have received the favorable opinion, dated as of Closing Time, of Simpson Thacher & Bartlett LLP, counsel for the Underwriters, in form and substance satisfactory to the Underwriters together with signed or reproduced copies of such letter for each of the other Underwriters with respect to matters as the Underwriters may request and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York and the federal law of the United States and the Delaware Limited Liability Company Act, upon the opinions of counsel satisfactory to the Underwriters. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company, the Parent Guarantor and its subsidiaries and certificates of public officials.

     (d) Officers’ Certificate. At Closing Time, shall not have been, since the date hereof or since the respective dates as of which information is given in the Prospectus or the General Disclosure Package, any material adverse change or prospective material adverse change in the financial condition, the earnings or the business affairs of the Company, the Parent Guarantor and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Underwriters shall have received a certificate of the President or a Vice President of the Company and the Parent Guarantor and of the chief financial or chief accounting officer of the Company and the Parent Guarantor, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1(a) hereof are true and correct with the same force and effect as though expressly made at and as of Closing Time, (iii) the Company and the Parent Guarantor have complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or, to their knowledge, contemplated by the Commission.

     (e) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the Underwriters shall have received from each of KPMG LLP and Deloitte & Touche LLP a letter dated such date, in form and substance reasonably satisfactory to the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus.

     (f) Bring-down Comfort Letter. At Closing Time, the Underwriters shall have received from Deloitte & Touche LLP a letter, dated as of Closing Time, to the effect that it reaffirms the statements made in the letter furnished pursuant to subsection (e) of this Section, except that the specified date referred to shall be a date not more than three business days prior to Closing Time.

     (g) Maintenance of Rating. At Closing Time, the Securities shall be rated at least Baa1 by Moody’s Investors Service Inc. and BBB- by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and the Company shall have delivered to the Underwriters a letter dated the Closing Time, from each such rating agency, or other evidence satisfactory to the Underwriters, confirming that the Securities have such ratings; and since the date of this Agreement (i) there shall not have occurred a downgrading in the rating assigned to the Securities or any of the Company’s or the Parent Guarantor’s other securities by any “nationally recognized statistical rating agency,” as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act and (ii) no such organization shall have publicly announced that it has under surveillance or review its rating of the Securities or any of the Company’s or the Parent Guarantor’s other securities, other than the negative credit watch announcements in effect as of the date of this Agreement.

     (h) Additional Documents. At Closing Time, counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company and the Parent Guarantor in connection with the issuance and sale of the Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Underwriters and counsel for the Underwriters.

     (i) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Underwriters by notice to the Company and the Parent Guarantor at any time at or prior to Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in full force and effect.

     SECTION 6. Indemnification.

     (a) Indemnification of Underwriters. The Company and the Parent Guarantor jointly and severally agree to indemnify and hold harmless each Underwriter, its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”), its selling agents and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

     (i) against any and all loss, liability, claim and damage whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430B Information, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

     (ii) against any and all loss, liability, claim and damage whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company and the Parent Guarantor;

     (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel to the extent provided in Section 6(c)), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Merrill Lynch expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430B Information or any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).

     (b) Indemnification of Company, Parent Guarantor, Directors and Officers. Each Underwriter severally agrees to indemnify and hold harmless the Company, the Parent Guarantor and each of their respective directors, each of their respective officers who signed the Registration Statement, and each person, if any, who controls the Company or the Parent Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430B Information or any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company and the Parent Guarantor by such Underwriter through Merrill Lynch expressly for use therein.

     (c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which

indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In case any such action is brought against any indemnified party, the indemnifying party may assume the defense of any litigation or proceeding in respect of which indemnity may be sought hereunder, including the employment of counsel. In any such litigation or proceeding the defense of which the indemnifying party shall have so assumed, any indemnified party shall have the right to participate in such litigation or proceeding and to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and such indemnified party shall have mutually agreed in writing to the retention of such counsel or experts, (ii) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest ; (iii) the indemnifying party shall have failed in a timely manner to assume the defense and employ counsel reasonably satisfactory to the indemnified party in such litigation or proceeding, or (iv) the named parties to any such litigation or proceeding (including any impleaded parties) include the indemnifying party and such indemnified party and representation of the indemnifying party and any indemnified party by the same counsel would, in the reasonable opinion of the indemnified party, be inappropriate due to actual or potential differing interests between the indemnifying party and any such indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

     (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. Notwithstanding the immediately preceding sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, an indemnifying party shall not be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its consent if such indemnifying party (i) reimburses such indemnified party in accordance with such request to the extent it considers such request to be reasonable and (ii) provides written notice to the indemnified party substantiating the unpaid balance as unreasonable, in each case prior to the date of such settlement.

     SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Parent Guarantor on the one hand and the Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in

clause (i) above but also the relative fault of the Company and the Parent Guarantor on the one hand and of the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

     The relative benefits received by the Company and the Parent Guarantor on the one hand and the Underwriters on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the Parent Guarantor and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus bear to the aggregate initial public offering price of the Securities as set forth on the cover of the Prospectus.

     The relative fault of the Company and the Parent Guarantor on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company and the Parent Guarantor or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

     The Company and the Parent Guarantor and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

     Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.

     No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

     For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and each director of the Company or the Parent Guarantor, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company or the Parent Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company and the Parent Guarantor. The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the principal amount of Securities set forth opposite their respective names in Schedule A hereto and not joint.

     SECTION 8. Representations, Warranties and Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company and the Parent Guarantor or any of their subsidiaries submitted pursuant hereto, shall remain operative and in full

force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company or the Parent Guarantor, and (ii) delivery of and payment for the Securities.

     SECTION 9. Termination of Agreement.

     (a) Termination; General. The Underwriters may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus (exclusive of any supplement thereto) or the General Disclosure Package, any material adverse change or prospective material adverse change in the financial condition, the earnings or business affairs of the Company, the Parent Guarantor and their subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Underwriters, impracticable or inadvisable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company or the Parent Guarantor has been suspended or materially limited by the Commission or the New York Stock Exchange, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the Financial Institutions Regulatory Authority or any other governmental authority, or a material disruption has occurred in commercial banking or securities settlement, or (iv) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or with respect to Clearstream or Euroclear systems in Europe, or (v) if a banking moratorium has been declared by either Federal or New York authorities.

     (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such termination and remain in full force and effect.

     SECTION 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the Underwriters shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Underwriters shall not have completed such arrangements within such 24-hour period, then:

          (a) if the number of Defaulted Securities does not exceed 10% of the aggregate principal amount of the Securities to be purchased hereunder, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or

          (b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount of the Securities to be purchased hereunder, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter.

     No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.

     In the event of any such default which does not result in a termination of this Agreement, either the Underwriters or the Company shall have the right to postpone Closing Time for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.

     SECTION 11. Tax Disclosure. Notwithstanding any other provision of this Agreement, immediately upon commencement of discussions with respect to the transactions contemplated hereby, the Company and the Parent Guarantor (and each employee, representative or other agent of the Company and the Parent Guarantor) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to the Company and the Parent Guarantor relating to such tax treatment and tax structure. For purposes of the foregoing, the term “tax treatment” is the purported or claimed federal income tax treatment of the transactions contemplated hereby, and the term “tax structure” includes any fact that may be relevant to understanding the purported or claimed federal income tax treatment of the transactions contemplated hereby.

     SECTION 12. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to an Underwriter shall be directed to such Underwriter at c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World Financial Center, New York, New York 10080, attention of Transaction Management Group (fax: (212) 449-2234); J.P. Morgan Securities Inc., 270 Park Avenue, New York, New York 10172, attention of Investment Grade Syndicate Desk (fax: (212) 834-6081); or HSBC Securities (USA) Inc., 452 Fifth Avenue, 3^rd Floor, New York, New York 10018, attention of Karen L. Giles (fax: (212) 525-0238) (with a copy to Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, attention of Walter A. Looney). Notices to the Company or the Parent Guarantor shall be directed to it at H&R Block World Headquarters, One H&R Block Way, Kansas City, Missouri 64105, (fax: (816) 854-8043, attention of HRB Treasury, with a copy to the HRB General Counsel (with a copy to Stinson Morrison Hecker LLP, 1201 Walnut Street, Kansas City, Missouri 64106, attention of Patrick J. Respeliers).

     SECTION 13. No Advisory or Fiduciary Relationship. The Company and the Parent Guarantor acknowledge and agree that (a) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the public offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company and the Parent Guarantor, on the one hand, and the several Underwriters, on the other hand, (b) in connection with the offering contemplated hereby and the process leading to such transaction each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, the Parent Guarantor or any of their respective stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company or the Parent Guarantor with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or the Parent Guarantor on other matters) and no Underwriter has any obligation to the Company or the Parent Guarantor with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and the Parent Guarantor, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company and the Parent Guarantor have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.

     SECTION 14. Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) among the Company, the Parent Guarantor and the Underwriters, or any of them, with respect to the subject matter hereof.

     SECTION 15. Parties. This Agreement shall each inure to the benefit of and be binding upon the Underwriters, the Company, the Parent Guarantor and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Company, the Parent Guarantor and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company, the Parent Guarantor and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

     SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

     SECTION 18. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

     SECTION 19. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

     If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters, the Company and the Parent Guarantor in accordance with its terms.

SCHEDULE A

		Principal
		Amount of
Name of Underwriter		Securities				Purchase Price
Merrill Lynch, Pierce, Fenner & Smith Incorporated		$	200,000,000			$	198,592,000
HSBC Securities (USA) Inc.		$	200,000,000			$	198,592,000
J.P. Morgan Securities Inc.		$	200,000,000			$	198,592,000
Total		$	600,000,000			$	595,776,000

Sch A-1

SCHEDULE B

Subsidiaries

4230 W. Green Oaks, Inc.
Aculink Mortgage Solutions, LLC
AcuLink of Alabama, LLC
BFC Transactions, Inc.
Birchtree Financial Services, Inc.
Birchtree Insurance Agency, Inc.
Block Financial LLC
Burr Oak Technical Solutions, Inc.
CFS-McGladrey, LLC
Cfstaffing, Ltd.
Companion Insurance, Ltd.
Companion Mortgage Corporation
Creative Financial Staffing of Western Washington, LLC
EquiCo Europe Limited
Equico, Inc.
Express Tax Service, Inc.
Financial Marketing Services, Inc.
Financial Stop Inc.
First Option Asset Management Services, Inc.
First Option Asset Management Services, LLC
FM Business Services, Inc.
Franchise Partner, Inc.
H&R Block (India) Private Limited
H&R Block (Nova Scotia), Incorporated
H&R Block Bank
H&R Block Canada Financial Services, Inc.
H&R Block Canada, Inc.
H&R Block Eastern Enterprises, Inc.
H&R Block Enterprises, Inc.
H&R Block Financial Advisors, Inc.
H&R Block Global Solutions (Hong Kong) Limited
H&R Block Group, Inc.
H&R Block Insurance Agency of Massachusetts, Inc.
H&R Block Insurance Agency, Inc.
H&R Block Limited
H&R Block Management, LLC
H&R Block Services, Inc.
H&R Block Tax and Business Services, Inc.
H&R Block Tax and Financial Services Limited
H&R Block Tax Institute, LLC
H&R Block Tax Services, Inc.
HRB Advance LLC

HRB Center LLC
HRB Concepts LLC
HRB Corporate Enterprises LLC
HRB Corporate Services LLC
HRB Digital LLC
HRB Digital Technology Resources LLC
HRB Expertise LLC
HRB Financial Corporation
HRB Innovations, Inc.
HRB International LLC
HRB Products LLC
HRB Professional LLC
HRB Progression LLC
HRB Property Corporation
HRB Realty Corporation
HRB Support Services LLC
HRB Tax & Technology Leadership LLC
HRB Tax & Technology Software LLC
HRB Technology Holding LLC
HRB Texas Enterprises, Inc.
OLDE Discount of Canada
OOMC Holdings LLC
OOMC Residual Corporation
Option One Advance Corporation
Option One Insurance Agency, Inc.
Option One Loan Warehouse LLC
Option One Mortgage Acceptance Corporation
Option One Mortgage Capital Corporation
Option One Mortgage Corporation
Option One Mortgage Corporation (India) Private Limited
Option One Mortgage Securities Corp.
Option One Mortgage Securities II Corp.
Option One Mortgage Securities III Corp.
Option One Mortgage Securities IV LLC
Option One Mortgage Services, Inc.
O’Rourke Career Connections, LLC
PDI Global, Inc.
Pension Resources, Inc.
Premier Mortgage Services of Washington, Inc.
Premier Property Tax Services, LLC
Premier Trust Deed Services, Inc.
RedGear Technologies, Inc.
RSM (Bahamas) Global, Ltd.
RSM Employer Services Agency of Florida, Inc.
RSM Employer Services Agency, Inc.
RSM Equico Canada, Inc.

RSM Equico Capital Markets, LLC
RSM Equico, Inc.
RSM McGladrey Business Services, Inc.
RSM McGladrey Business Solutions, Inc.
RSM McGladrey Employer Services, Inc.
RSM McGladrey Financial Process Outsourcing India Pvt. Ltd.
RSM McGladrey Financial Process Outsourcing, LLC
RSM McGladrey Insurance Services, Inc.
RSM McGladrey TBS, LLC
RSM McGladrey, Inc.
ServiceWorks, Inc.
TaxNet Inc.
TaxWorks, Inc.
The Tax Man, Inc.
West Estate Investors, LLC
Woodbridge Mortgage Acceptance Corporation

SCHEDULE C

$600,000,000

Block Financial LLC

7.875% Notes due 2013

Fully and Unconditionally Guaranteed by
H&R Block, Inc.

Issuer:		Block Financial LLC, a Delaware limited liability company
Guarantor:		H&R Block, Inc., a Missouri corporation
Type:		SEC Registered
Ratings:		Baa1/BBB-/BBB (NegWatch/NegOutlook/NegWatch) (Moody’s/S&P/Fitch)
Size:		US$600,000,000
Trade Date:		January 8, 2008
Settlement Date:		January 11, 2008 (T+3 days)
Maturity:		January 15, 2013
Interest Rate Per Annum:		7.875%
Interest Payment Dates:		Semi-annually on the 15th of each July and January
First Interest Payment Date:		July 15, 2008
Public Offering Price:		99.896%
Treasury Benchmark:		3.625% due 12/12
Treasury Price:		$102-15 3/4
Treasury Yield:		3.081%
Re-offer Spread vs. Treasury		+481.9 bps
Yield to Maturity:		7.900%
Net Proceeds:		$595,776,000
Interest Rate Adjustment:		The interest rate payable on the notes will be subject to adjustment from time to time if either Moody’s or S&P downgrades (or subsequently upgrades) the debt rating assigned to the notes as described under “Description of Notes – Interest Rate Adjustment” in the preliminary prospectus supplement.
Optional Redemption:		At any time, in whole or in part, at a redemption price equal to the greater of: i) 100% of the principal amount of the notes to be redeemed, plus accrued interest to the redemption date, or ii) the sum of the present values of the remaining principal amount and scheduled payments of interest on the notes to be redeemed (not including any portion of payments of interest accrued as a of the redemption date) discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 70 basis points plus accrued interest to the redemption date.

Mandatory Offer to Repurchase Notes:		In the event of a “Change of Control Triggering Event” as defined in the preliminary prospectus supplement at 101% of their principal amount, plus accrued and unpaid interest.
Day Count:		30/360
Minimum Denomination / Multiples:		$2,000 / $1,000
Joint Bookrunners:		Merrill Lynch, Pierce, Fenner & Smith Incorporated J.P. Morgan Securities Inc. HSBC Securities (USA) Inc.
CUSIP / ISIN:		093662 AD6 / US093662AD66
Additional Information:		As of October 31, 2007, as adjusted to give effect to the sale of the notes and the application of the net proceeds as described in the preliminary prospectus supplement, cash and cash equivalents would have been $510.9 million, short-term debt would have been $39.6 million, long-term debt would have been $2.7 billion, total debt $2.8 billion and total capitalization would have been $3.3 billion. In addition, on a pro forma basis giving effect to this offering and the application of the net proceeds there from, as of October 31, 2007, Block Financial LLC would have had approximately $2.7 billion of indebtedness ranking pari passu with the notes.
		On January 2, 2008, the Mississippi Attorney General filed an action concerning the Express IRA product in the Chancery Court of Hinds County, Mississippi, First Judicial District (Case No. G-2008-6) entitled Jim Hood, Attorney General for the State of Mississippi, ex rel. the State of Mississippi v. H&R Block, Inc., et al. This action asserts claims concerning the Express IRA product similar to those claims asserted in lawsuits previously disclosed by H&R Block, Inc. in its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We intend to defend this case vigorously, but there are no assurances as to its outcome.

The issuer has filed a registration statement (including a prospectus) with the Securities and Exchange Commission, or SEC, for the offering to which this communication relates. Before you invest, you should read the preliminary prospectus supplement, the accompanying prospectus and the other documents the company has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, the company, any underwriter or any dealer participating in the offering will arrange to send you these documents if you request them by contacting Merrill Lynch, Pierce, Fenner & Smith Incorporated at 1-866-500-5408, J.P. Morgan Securities Inc. at 212-834-4533, or HSBC at 1-866-811-8049.

This communication should be read in conjunction with the preliminary prospectus supplement dated January 8, 2008 and the accompanying prospectus dated October 21, 2004.

EXHIBIT 2.1

CERTIFICATE OF CONVERSION
FROM A CORPORATION TO A LIMITED LIABILITY COMPANY
PURSUANT TO SECTION 266 OF THE DELAWARE GENERAL CORPORATION LAW

     1. The name of the corporation is Block Financial Corporation.

     2. The date on which the original Certificate of Incorporation was filed with the Secretary of State was May 19, 1992.

     3. The name of the limited liability company into which the corporation is herein being converted is Block Financial LLC.

     4. This Certificate of Conversion shall be effective on January 1, 2008.

     5. The conversion has been approved in accordance with the provisions of Section 266.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of Conversion this 19th day of December, 2007.

EXHIBIT 3.1

CERTIFICATE OF FORMATION

OF

BLOCK FINANCIAL LLC

     1. The name of the limited liability company is Block Financial LLC.

     2. The address of its registered office in the State of Delaware is: Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

     3. This Certificate of Formation shall be effective on January 1, 2008.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of Block Financial LLC this 19th day of December, 2007.

EXHIBIT 3.2

OPERATING AGREEMENT
OF
BLOCK FINANCIAL LLC

A DELAWARE LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

     THIS OPERATING AGREEMENT (this “Agreement”) is executed as of January 1, 2008 and made effective at 6:20 a.m. as of the same date by H&R Block Group, Inc., a Delaware corporation, as the sole member of Block Financial LLC, a Delaware limited liability company.

RECITALS

     WHEREAS, H&R Block Group, Inc. desires that this Agreement govern the relationship between H&R Block Group, Inc. and Block Financial LLC, pursuant to the Delaware Limited Liability Company Act (the “Act”).

     NOW, THEREFORE, the terms and conditions under which Block Financial LLC is to be organized and operated are as follows:

ARTICLE I
DEFINITIONS

     1.1 Definitions. For purposes of this Agreement, and unless the context clearly otherwise indicates, the following capitalized terms shall have the following meanings:

     “Act” – Delaware Limited Liability Company Act, as amended from time to time.

     “Code” — The Internal Revenue Code of 1986, as amended.

     “Company” – Block Financial LLC, a Delaware limited liability company.

     “Member” – H&R Block Group, Inc., as the sole initial member of the Company, and any other person or persons who may subsequently be designated as a member of this Company pursuant to the terms of this Agreement.

     “Membership Interest” — The rights of a Member in distributions and allocations of profits, losses, gains, deductions and credits.

     “Membership Rights” — The rights of a Member, which are comprised of (1) his or her Membership Interest, and (2) his or her right to vote and to otherwise participate in the management and governance of Company.

     “Persons” — Individuals, partnerships, corporations, limited liability companies, unincorporated associations, trusts, estates and any other type of entity.

ARTICLE II
FORMATION

     2.1 Organization. Member acknowledges the formation of the Company as a Delaware limited liability company pursuant to the provisions of the Act.

     2.2 Name. The name of the Company is Block Financial LLC.

     2.3 Principal Place of Business. The Company’s principal place of business is One H&R Block Way, Kansas City, Missouri 64105 or any place or places as Member may from time to time deem advisable.

     2.4 Registered Agent. The registered agent for the Company is The Corporation Trust Company and the business address of the registered agent is Corporation Trust Center, 1209 Orange St., Wilmington, DE 19801. Member may, from time to time, change the registered agent or the registered office through appropriate filings with the Secretary of State. In the event the registered agent ceases to act as such for any reason or the registered office shall change, Member shall promptly designate a replacement registered agent or file a notice of change of address as the case may be.

     2.5 Duration. The duration of the Company is perpetual.

     2.6 Permitted Business. The business of the Company shall be to transact any and all lawful business for which a limited liability company may be organized under the Delaware Limited Liability Company Act, as amended from time to time.

ARTICLE III
CONTRIBUTIONS

     3.1 Initial Contributions. The initial capital contributions to the Company of Member shall be made concurrently with Member’s execution and delivery of this Agreement. Member’s initial capital contribution shall consist of the assets set forth on Exhibit A.

     3.2 Additional Contributions. Member shall not be required to make any additional contributions of capital to the Company, and neither Member nor any Designee shall have any personal liability for any obligations of the Company.

     3.3 Loans. In the event the capital needs of the Company exceed the capital contributions provided by Section 3.1 above, Member may, but shall not be required to, loan additional monies to the Company in amounts and on terms and conditions to be agreed upon by the Company and Member. The Company may also borrow money for its capital needs from any third parties in amounts and on terms and conditions determined by Member.

     3.4 Interest on and Return of Capital Contribution. Member shall not be entitled to interest on any capital contribution, or to a return of any capital contribution, except as specifically provided for herein.

ARTICLE IV
DISTRIBUTIONS

     4.1 Distributions. Cash distributions shall be made in such amounts and at such times as may be determined by Member in its discretion.

     4.2 Limitations on Distributions. No distribution shall be declared or paid unless, after the distribution is made, the Company’s assets exceed the Company’s liabilities. Liabilities to Member on account of his Membership Interest shall not be a Company liability for purposes of this section.

ARTICLE V
RIGHTS AND DUTIES OF MEMBER

     5.1 Management of the Company. The Company shall be managed by Member. Member is the Company’s agent and shall have authority to take all actions, including incurring debt, entering contracts, and acquiring and transferring property, on the Company’s behalf and such actions shall bind the Company. The decisions and actions of the Member shall be carried out by the officers of the Company. The Company shall have such officers as are authorized by the Member. The following individuals shall initially hold the office set opposite his/her name below:

Bennett, Alan M.		President
Nachbor, Jeffrey E.		Senior Vice President and Corporate Controller
Shulman, Becky S.		Senior Vice President and Treasurer
Barney, Kathleen E.		Vice President
Ciaramitaro, Mark A.		Vice President
Markey, Julie		Vice President, DTS Sales and Distribution
Webb, R. Douglas		Assistant Vice President and Assistant Secretary
Wilson, Bret G.		Secretary
Somora, Andrew J.		Assistant Secretary
Hart, Bradley		Assistant Treasurer
Karlin, James E.		Assistant Treasurer
Phillips, Thomas		Assistant Treasurer

     5.2 Liability of Member. Member shall not be liable for the Company’s liabilities, debts or obligations. The failure by the Company to observe any formalities or requirements relating to the exercise of its powers or the management of its business or affairs under this Agreement or the Act shall not be grounds for imposing personal liability on Member.

     5.3 Indemnification.

     (a) Member, the Designee(s) and their respective affiliates, stockholders, members, managers, directors, officers, partners, employees, agents and representatives (individually, an “Indemnitee”) shall be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities, expenses (including legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise by reason of that Indemnitee’s status as any of the foregoing, which relates to or arises out of the Company, its assets, business or affairs, if in each of the foregoing cases (i) Indemnitee acted in good faith and in a manner the Indemnitee believed to be in, or not opposed to, the best interests of the Company, and, with respect to any criminal proceeding, had no reasonable cause to believe such Indemnitee’s conduct did not constitute gross negligence or willful or wanton misconduct. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that the Indemnitee acted in a manner contrary to that specified in (i) or (ii) above. Any indemnification pursuant to this Section 5 shall be made only out of the assets of the Company and Member shall not have any person liability on account thereof.

     (b) Expenses (including reasonable legal fees) incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding described in Section 5.1(a) may be advanced, from time to time, by the Company prior to the final disposition of such claim, demand, action, suit or proceeding, in the discretion of Member, upon receipt by the Company of an undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 5.

     (c) The indemnification and advancement of expenses set forth in this Section 5 shall not be exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any statute, the Company’s articles of organization, this Agreement, any other agreement, a vote of Member, a policy of insurance or otherwise, and shall not limit in any way any right which the Company may have to make additional indemnifications with respect to the same or different persons or classes of persons, as determined by Member. The indemnification and advancement of expenses set forth in this Section 5 shall continue as to a person or entity who has ceased

to hold the position giving rise to such indemnification and shall inure to the benefit of the heirs, executors, administrators, successors and assigns of such a person or entity.

     (d) The Company may purchase and maintain insurance on behalf of any Indemnitee against any liability asserted against an Indemnitee and incurred by an Indemnitee in such capacity, or arising out of such Indemnitee’s status as aforesaid, whether or not the Company would have the power to indemnify such Indemnitee against such liability under this Section 5.

     5.4 Fiduciary Duties and Obligations. Member shall have no fiduciary duties of loyalty or otherwise with respect to the Company.

ARTICLE VI
TREATMENT FOR TAX PURPOSES

     Pursuant to existing law, the Company will be disregarded as an entity separate from its owner for federal and state income tax purposes.

ARTICLE VII
ACCOUNTING AND RECORDS

     7.1 Records. The Company shall maintain at its principal place of business or such other place as Member may choose, the following:

     (a) a current list of the full name and last-known business, residence, or mailing address of Member, both past and present;

     (b) a copy of the Articles of Organization and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any amendment has been
executed;

     (c) copies of the Company’s federal, state, and local income tax returns and reports, if any, for the three most recent years;

     (d) copies of any currently effective written operating agreements, copies of any writings permitted or required under the Act, and copies of any financial statements of
the Company for the three most recent years;

     (e) minutes of any member meetings;

     (f) unless contained in this Agreement or any amendment thereto or in a writing permitted or required under the Act, a statement prepared and certified as accurate by the
Member which describes:

     (i) the amount of cash and a description and statement of the agreed value of the other property or services contributed by each member and which each member has agreed to contribute in the future;

     (ii) the times at which or events on the happening of which any additional contributions agreed to be made by each member are to be made;

     (iii) if agreed upon, the time at which or the events on the happening of which a member may terminate his membership in the limited liability company and the amount of, or the method of determining, the distribution to which he may be entitled respecting his membership interest and the terms and conditions of the termination and distribution;

     (iv) any right of a member to receive distributions which include a return of all or any part of a member’s contribution; and

     (v) any written consents obtained from members pursuant to the Act.

ARTICLE VIII
TRANSFER OF MEMBERSHIP INTEREST

     8.1 Transfer. Member may sell, hypothecate, pledge, assign or otherwise voluntarily, during Member’s lifetime or upon his death, transfer any part or all of his Membership Interest or Membership Rights in the Company to any other person. In the event Member transfers his entire Membership Interest, the transferee(s) shall become a member without any further action, unless Member and the transferee agree otherwise.

ARTICLE IX
WITHDRAWAL OF MEMBER

     9.1 Withdrawal of Member. Member has the power to withdraw from the Company at any time.

ARTICLE X
DISSOLUTION AND TERMINATION

     10.1 Events of Dissolution. The Company shall dissolve upon the occurrence of any of the following events:

(a) When the period fixed for the Company’s duration expires;

(b) By Member’s written statement of dissolution; or

(c) By the entry of a decree of judicial dissolution pursuant to the Act.

     10.2 Effect of Filing of Dissolving Statement. As soon as possible following the occurrence of any of the events specified in this section which effect the dissolution of the Company, an appropriate representative of the Company shall execute and file a statement of intent to dissolve in such form as shall be prescribed by the Delaware Secretary of State. Upon the filing with the Delaware Secretary of State of a statement of intent to dissolve, the Company shall cease to carry on its business, except insofar as may be necessary for the winding up of its business, but its separate existence shall continue until articles of dissolution have been filed with the Secretary of State or until a decree dissolving the Company has been entered by a court of competent jurisdiction.

     10.3 Winding Up, Liquidation and Distribution of Assets.

(a) Upon dissolution, an accounting shall be made of the accounts of the Company and of the Company’s assets, liabilities and operations, from the date of the last previous accounting until the date of dissolution. Member shall immediately proceed to wind up the affairs of the Company.

     (b) If the Company is dissolved and its affairs are to be wound up, Member shall (1) sell or otherwise liquidate all of the Company’s assets as promptly as practicable (except to the extent they may determine to receive any assets in kind), (2) discharge all liabilities of the Company (other than liabilities to Member), including all costs relating to the dissolution, winding up, and liquidation and distribution of assets, (3) establish such reserves as reasonably may be necessary to provide for contingent liabilities of the Company, (4) discharge any liabilities of the Company to Member other than on account of his interest in Company capital or profits, and (5) distribute the remaining assets to Member:

     (c) Upon completion of the winding up, liquidation and distribution of the assets, the Company shall be deemed terminated.

     (d) Member shall comply with any applicable requirements of applicable law pertaining to the winding up of the affairs of the Company and the final distribution of its assets.

     10.4 Articles of Dissolution. When all debts, liabilities and obligations have been paid and discharged or adequate provision has been made therefor and all of the remaining property and assets have been distributed to Member, articles of dissolution shall be executed in duplicate and verified by the person signing the articles, which articles shall set forth the information required by the Act.

     10.5 Filing of Articles of Dissolution.

     (a) Duplicate originals of such articles of dissolution shall be delivered to the Delaware Secretary of State.

     (b) Upon the filing of the articles of dissolution, the existence of the Company shall cease, except for the purpose of suits, other proceedings and appropriate action as provided in the Act. Member shall thereafter be a trustee for creditors of the Company and as such shall have authority to distribute any Company property discovered after dissolution, convey real estate, and take such other action as may be necessary on behalf of and in the name of the Company.

     10.6 Responsibility. Upon dissolution, Member shall look solely to the assets of the Company for the return of his Capital Contribution. The winding up of the affairs of the Company and the distribution of its assets shall be conducted by Member who is hereby authorized to take all actions necessary to accomplish such distribution, including, without limitation, selling any Company assets he deems necessary or appropriate to sell.

ARTICLE XI
GOVERNING LAW

     11.1 Governing Law. It is the intent of the parties hereto that all questions with respect to the construction of this Agreement and the rights, duties, obligations and liabilities of the parties shall be determined in accordance with the applicable provisions of the laws of the State of Missouri.

ARTICLE XII
MISCELLANEOUS PROVISIONS

     12.1 Assignment. This Agreement shall be binding upon, and inure to the benefit of, all parties hereto, their personal and legal representatives, guardians, successors, and assigns to the extent, but only to the extent, that assignment is provided for in accordance with, and permitted by, the provisions of this Agreement.

     12.2 No Limit on Personal Activities. Nothing herein contained shall be construed to limit in any manner Member or his respective agents, servants, and employees, in carrying out his separate businesses or activities.

     12.3 Gender and Headings. Throughout this Agreement, where such meanings would be appropriate (a) the masculine gender shall be deemed to include the feminine and the neuter and vice versa, and (b) the singular shall be deemed to include the plural and vice versa. The headings herein are inserted only as a matter of convenience and reference, and in no way define or describe the scope of the Agreement or the intent of any provisions thereof.

     12.4 Severability. Nothing contained in this Agreement shall be construed as requiring the commission of any act contrary to law. In the event there is any conflict between any provision of this Agreement and any statute, law, ordinance or regulation contrary to which

Member or the Company have no legal right to contract, the latter shall prevail, but in such event the provisions of this Agreement thus affected shall be curtailed and limited only to the extent necessary to conform with said requirement of law. In the event that any part, article, section, paragraph or clause of this Agreement shall be held to be indefinite, invalid, or otherwise unenforceable, the entire Agreement shall not fail on account thereof, and the balance of the Agreement shall continue in full force and effect.

     12.5 Membership Interest. Member hereby covenants, acknowledges and agrees that the Membership Interest in the Company shall for all purposes be deemed personalty and shall not be deemed realty or any interest in the assets or property owned by the Company.

     12.6 Not For Benefit of Creditors. The provisions of this Agreement are intended only for the regulation of relations between Member and the Company. This Agreement is not intended for the benefit of creditors and does not grant any rights to or confer any benefits on creditors or any other person who is not a Member of the Company.

     12.7 Amendment. Amendments to this Agreement and the Articles of Organization shall be effective upon approval in writing by Member.

     IN WITNESS WHEREOF, Member has executed or caused this Agreement to be executed on the date first set forth above.

MEMBER:
H&R BLOCK GROUP, INC.
By:		/s/ Bret G. Wilson   Bret G. Wilson
		President

EXHIBIT 3.2

EXHIBIT A

INITIAL CAPITAL CONTRIBUTION

100 shares of stock held by the Member in Block Financial Corporation prior to its conversion

EXHIBIT 4.1

BLOCK FINANCIAL LLC

OFFICERS’ CERTIFICATE

     The undersigned, Becky S. Shulman, Senior Vice President and Treasurer of Block Financial LLC, a Delaware limited liability company (f/k/a Block Financial Corporation, the “Company”), and Bret G. Wilson, Secretary of the Company, do hereby certify that, pursuant to the Indenture, dated October 20, 1997 (the “Indenture”), among the Company, H&R Block, Inc. (“Block”) and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company) (“Deutsche Bank”), as supplemented by that certain First Supplemental Indenture, dated as of April 18, 2000, among the Company, Block, Deutsche Bank and The Bank of New York, as separate trustee under the Indenture in respect of the Company’s 8.50% Notes due 2007, a series of debt securities of the Company is hereby established with the terms set forth below. Unless otherwise defined herein, capitalized terms used herein have the meanings given thereto in the Indenture.

(1)		The title of the securities shall be “7.875% Notes due 2013” (the “Notes”).
(2)		Deutsche Bank has been appointed as the Trustee under the Indenture and as Registrar, paying agent, transfer agent and authenticating agent with respect to the Notes.
(3)		The aggregate principal amount of the Notes which may be initially authenticated and delivered under the Indenture with respect to this series of Notes shall be initially limited to a maximum of $600,000,000, subject to the right of the Company to issue additional principal amount of the Notes of this series at any time and from time to time.
(4)		The Stated Maturity of the Notes is January 15, 2013.
(5)		The Notes shall bear interest at the rate of 7.875% per annum (the “Original Interest Rate”), which interest shall accrue from January 11, 2008, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, on the Notes until their principal is paid. Interest shall be payable semi-annually on January 15 and July 15 (each an “Interest Payment Date”), commencing on July 15, 2008, to Holders of record at the close of business on the December 31 or June 30, respectively, next preceding each such Interest Payment Date, whether or not a business day.
(6)		The Company hereby designates as Places of Payment for the Notes (i) the principal corporate trust office of Deutsche Bank in the Borough of Manhattan, The City of New York, New York, or (ii) any other banking institution hereafter selected by the officers of the Company. Such Place of Payment shall also be (a) where the Notes may be presented for registration of transfer or exchange, (b) where notices and demands to or upon the Company in respect of the Notes or the Indenture may be made or served and (c) where the Notes may be presented for payment of principal and interest.
(7)		The Notes are approved in the form attached hereto as Exhibit A and shall be issued upon original issuance in whole in the form of book-entry Global Securities, and the Depositary shall be The Depository Trust Company, New York, New York. Such Global

		Securities shall bear the legends set forth in the form of Note attached as Exhibit A hereto.
(8)		In addition to the circumstances specified in Section 2.15(c)(i) and (ii) of the Indenture, the Global Securities may be exchanged for individual Notes in definitive registered form if an Event of Default has occurred and is continuing.
(9)		The Company may redeem the Notes at any time prior to maturity in whole, or in part, at a redemption price equal to the greater of:

	(a)		100% of the principal amount of the Notes to be redeemed, plus accrued interest to the redemption date, or
	(b)		the sum of the present values of the remaining principal amount and scheduled payments of interest on the Notes to be redeemed (not including any portion of payments of interest accrued as of the redemption date) discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 70 basis points plus accrued interest to the redemption date.

The redemption price shall be calculated assuming a 360-day year consisting of twelve 30-day months.

For purposes of the Notes:

     “Treasury Rate” means, with respect to any redemption date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated on the third business day preceding the redemption date, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.

     “Comparable Treasury Issue” means the United States Treasury security selected by the Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.

     “Comparable Treasury Price” means, with respect to any redemption date:

	(x)		the average of the Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations, or
	(y)		if the Trustee obtains fewer than five Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received.

     “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Trustee in consultation with the Company.

     “Reference Treasury Dealer” means (a) each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and HSBC Securities (USA) Inc. and their respective successors, unless any of them ceases to be a primary U.S. government securities dealer in New York City (a “Primary Treasury Dealer”), in which case the Company shall substitute another Primary Treasury Dealer, and (b) any other Primary Treasury Dealer selected by the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by that Reference Treasury Dealer at 3:30 p.m., New York City time, on the third Business Day preceding that redemption date.

     Notice of any redemption shall be given at least 30 days but not more than 60 days before the redemption date to each Holder of the Notes to be redeemed. Notices of redemption may not be conditional. Unless there exists a default in payment of the redemption price, on and after the redemption date, interest shall cease to accrue on the Notes or portions of the Notes called for redemption.

     If less than all of the Notes are to be redeemed at any time, the Trustee shall select Notes for redemption on a pro rata basis, by lot or by such method as the Trustee deems fair and appropriate; provided, however, that, so long as the Notes are held in book-entry form, the Notes shall be selected for redemption in accordance with the Depositary’s then-current practice.

(10)

Upon the occurrence of a Change of Control Triggering Event (as defined herein), unless the Company has exercised its right to redeem the Notes pursuant to paragraph (9) hereof, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of their Notes as provided herein (the “Change of Control Offer”) at a purchase price in cash equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest, if any, on such Notes to the date of purchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event, the Company shall send, by first class mail, a notice to each Holder of Notes, with a written copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice shall state:

	(i)		a description of the transaction or transactions that constitute such Change of Control Triggering Event;
	(ii)		that the Change of Control Offer is being made pursuant to this paragraph (10) and that all Notes validly tendered will be accepted for payment;

	(iii)		the Change of Control Payment and the date on which the Change of Control Payment will be made (the “Change of Control Payment Date”), which shall be a Business Day that is no earlier than 30 days nor later than 60 days from the date the notice is mailed, other than as may be required by law;
	(iv)		that any Note not tendered will continue to accrue interest;
	(v)		that any Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on and after the Change of Control Payment Date unless the Company shall default in the Change of Control Payment and the only remaining right of the Holder thereof is to receive the Change of Control Payment upon surrender of such Note to the paying agent;
	(vi)		that Holders of the Notes electing to have a portion of a Note purchased pursuant to the Change of Control Offer may only elect to have such Note purchased in a principal amount of $2,000 or integral multiples of $1,000 in excess thereof;
	(vii)		that if a Holder of Notes elects to have such Notes purchased pursuant to the Change of Control Offer it will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, or transfer by book-entry transfer, to the paying agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date;
	(viii)		that a Holder of Notes will be entitled to withdraw its election if the Company receives, not later than the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Notes such Holder delivered for purchase, and a statement that such Holder is withdrawing its election to have such Notes purchased; and
	(ix)		that if Notes are purchased only in part a new Note of the same type will be issued in a principal amount equal to the unpurchased portion of the Notes surrendered.

     On the Change of Control Payment Date, the Company shall, to the extent lawful, (a) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (b) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof properly tendered and (c) deliver or cause to be delivered to the Trustee for cancellation the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The paying agent shall

promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee, upon receipt of an order from the Company, shall promptly authenticate and mail (or cause to be transferred by book entry) to such Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered by such Holder, if any, in denominations as set forth in the Indenture.

     The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934 (the “Exchange Act”) and any other applicable securities laws and regulations. To the extent that the provisions of any securities laws or regulations conflict with this paragraph (10), the Company and Block will comply with the applicable securities laws and regulations and will not be deemed to have breached its or their obligations under this paragraph (10) by virtue of such conflicts.

     For purposes of the Notes:

     “Below Investment Grade Rating Event” means the ratings on the Notes are lowered by each of the Rating Agencies and the Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of the Change of Control (which 60-day period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by any of the Rating Agencies); provided that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Triggering Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee or the Company in writing at the Trustee’s or the Company’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).

     “Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participation or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock and limited liability or partnership interests (whether general or limited), but excluding any debt securities convertible into such equity.

     “Change of Control” means the occurrence of any of the following:

   (a) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of Block’s properties or assets and of

Block’s Subsidiaries’ properties or assets taken as a whole to any Person or group of related “persons” (as that term is used in Section 13(d)(3) of the Exchange Act) (a “Group”) other than the Company or Block or one of their Subsidiaries;

   (b) the adoption of a plan relating to liquidation or dissolution of Block;

   (c) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any Person or Group becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Company’s or Block’s Voting Stock; or

   (d) the first day on which a majority of the members of the board of directors of Block are not Continuing Directors.

     Notwithstanding the foregoing, a transaction will not be considered to be a Change of Control if (i) Block becomes a direct or indirect wholly owned subsidiary of a holding company and (ii) immediately following that transaction, (A) the direct or indirect holders of the Voting Stock of the holding company are substantially the same as the holders of Block’s Voting Stock immediately prior to that transaction or (B) no Person or Group is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of the holding company.

     “Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

     “Continuing Director” means, as of any date of determination, any member of the board of directors of Block who (i) was a member of the board of directors of Block on the date of the issuance of the Notes or (ii) was nominated for election, elected or appointed to Block’s board of directors with the approval of a majority of the Continuing Directors who were members of the board of directors of Block at the time of such nomination, election or appointment (either by a specific vote or by approval of Block’s proxy statement in which such member was named as a nominee for election as a director).

     “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P.

     “Moody’s” means Moody’s Investors Service, Inc. or its successor.

     “Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision thereof or any other entity, and includes a “person” as used in Section 13(d)(3) of the Exchange Act.

     “Rating Agencies” means (i) each of Moody’s and S&P and (ii) if either of Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s or Block’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by Block (as certified by a resolution of the board of directors of Block) as a replacement agency for Moody’s or S&P, or both of them, as the case may be.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or its successor.

     “Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors, managers or trustees, as applicable.

(11)		Unless a Change of Control Triggering Event has occurred, the Holders of the Notes shall not have the right to demand repayment of the Notes prior to maturity.
(12)		The interest rate payable on the Notes shall be subject to adjustments from time to time if either Moody’s or S&P downgrades (or subsequently upgrades) the debt rating assigned to the Notes, as set forth below.

     If the rating from Moody’s of the Notes is decreased to a rating set forth in the immediately following table, the interest rate on the Notes shall increase from the Original Interest Rate by the percentage set forth opposite that rating:

Rating		Percentage
Ba1			0.25	%
Ba2			0.50	%
Ba3			0.75	%
B1 or below			1.00	%

     If the rating from S&P of the Notes is decreased to a rating set forth in the immediately following table, the interest rate on the Notes shall increase from the Original Interest Rate by the percentage set forth opposite that rating:

Rating		Percentage
BB+			0.25	%
BB			0.50	%
BB-			0.75	%
B+ or below			1.00	%

     Notwithstanding the foregoing, if at any time the interest rate on the Notes has been adjusted upward and either Moody’s or S&P, as the case may be, subsequently increases its rating of the Notes to any of the threshold ratings set forth in the tables above, the interest rate on the Notes shall be decreased such that the interest rate for the Notes equals the Original Interest Rate plus the percentages set forth opposite the ratings from the tables above in effect immediately following the increase. If Moody’s subsequently increases its rating of the Notes to Baa3 or higher and S&P increases its rating to BBB- or higher the interest rate on the Notes shall be decreased to the Original Interest Rate.

     Each adjustment required by any decrease or increase in a rating set forth above, whether occasioned by the action of Moody’s or S&P, shall be made independent of any and all other adjustments. In no event shall (1) the interest rate for the Notes be reduced to below the Original Interest Rate or (2) the total increase in the interest rate on the Notes exceed 2.00% above the Original Interest Rate.

     If either Moody’s or S&P ceases to provide a rating of the Notes, any subsequent increase or decrease in the interest rate of the Notes necessitated by a reduction or increase in the rating by the agency continuing to provide the rating shall be twice the percentage set forth in the applicable table above. No adjustments in the interest rate of the Notes shall be made solely as a result of either Moody’s or S&P ceasing to provide a rating. If both Moody’s and S&P cease to provide a rating of the Notes, the interest rate on the Notes shall increase to, or remain at, as the case may be, 2.00% above the Original Interest Rate.

     Any interest rate increase or decrease described above shall take effect from the first day of the interest period during which a rating change requires an adjustment in the interest rate.

     The interest rate on the Notes shall permanently cease to be subject to any adjustment described above (notwithstanding any subsequent decrease in the ratings by either or both rating agencies) and, if applicable, shall be decreased to the interest rate payable on the Notes on the date of their issuance, if the Notes become rated A3 and BBB or higher by Moody’s and S&P, respectively (or one of these ratings if only rated by one rating agency), with a stable or positive outlook by each of the rating agencies.

(13)

The Notes shall be general unsecured obligations of the Company and shall rank equal in right of payment, on a pari passu basis, with all of its other existing and future unsecured and unsubordinated senior indebtedness. The Notes shall be fully and unconditionally guaranteed on a senior unsecured basis by Block. The guarantee shall rank equal in right of payment, on a pari passu basis, with all of Block’s existing and future unsecured and unsubordinated senior indebtedness and guarantees.

(14)		The Notes shall not be subject to any sinking fund requirement.
(15)		Section 4.10 of the Indenture with respect to the Notes shall be replaced with the following:

Limitation on Liens. Unless Block contemporaneously secures the Notes equally and ratably with (or prior to) such obligation, Block shall not, and shall not permit any of its Subsidiaries to create or permit to exist any Lien on any Principal Property, or any shares of stock or Indebtedness of any Restricted Subsidiary whether owned on the date of issuance of the Notes or thereafter acquired, securing any obligation except for:

	(i)		Permitted Liens; or
	(ii)		Liens securing Indebtedness if, after giving pro forma effect to the incurrence of such Indebtedness (and the receipt and application of the proceeds thereof) or the securing of outstanding Indebtedness, all Indebtedness of Block and its Subsidiaries secured by Liens on any Principal Property (other than Permitted Liens), at the time of determination does not exceed the greater of $250,000,000 or 15% of the total consolidated stockholders’ equity of Block as shown on the audited consolidated balance sheet contained in the latest annual report to stockholders of Block.

(16)

The definition of “Credit Agreement “ in the Indenture with respect to the Notes shall be replaced with the following:

“Credit Agreements “ means each of the following, as supplemented, amended, modified, refinanced or replaced at any time from time to time:

	(a)		Credit and Guarantee Agreement dated as of January 10, 2008 among HSBC Finance Corporation, as lender, Block Financial LLC, as borrower, and H&R Block, Inc.;
	(b)		Amended and Restated Bridge Credit and Guarantee Agreement (HSBC) dated as of December 20, 2007, among Block Financial LLC, H&R Block, Inc. and HSBC Bank USA, National Association;
	(c)		Amended and Restated Bridge Credit and Guarantee Agreement (BNPP) dated as of December 20, 2007, among Block Financial LLC, H&R Block, Inc., the lenders party thereto and BNP Paribas;
	(d)		Amended and Restated Five-Year Credit and Guarantee Agreement dated as of August 10, 2005 among Block Financial Corporation, H&R Block, Inc., the lenders party thereto, Bank of America, N.A., HSBC Bank USA, National Association, Royal Bank of Scotland PLC, JPMorgan Chase Bank, N.A., and J.P Morgan Securities Inc.;

	(e)		Five-Year Credit and Guarantee Agreement dated as of August 10, 2005 among Block Financial Corporation, H&R Block, Inc., the lenders party thereto, Bank of America, N.A., HSBC Bank USA, National Association, The Royal Bank of Scotland PLC, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities, Inc.;
	(f)		Advances, Pledge and Security Agreement dated April 17, 2006, between H&R Block Bank and the Federal Home Loan Bank of Des Moines; and
	(g)		The Servicing Advance Facility among Option One Mortgage Corporation, Greenwich Capital Financial Products, Inc. and The CIT Group/Business Credit, Inc.

(17)

The definition of “Permitted Lien” in the Indenture with respect to the Notes shall be replaced with the following:

“Permitted Liens” means, with respect to any Person,

	(a)		Pledges or deposits by such Person under worker’s compensation laws, unemployment insurance laws, social security laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or bonds to secure performance, surety or appeal bonds to which such Person is a party or which are otherwise required of such Person, or deposits as security for contested taxes or import duties or for the payment of rent or other obligations of like nature, in each case Incurred in the ordinary course of business;
	(b)		Liens imposed by law, such as carriers’, warehousemen’s, laborers’, materialmen’s, landlords’, vendors’, workmen’s, operators’, factors and mechanics liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings;
	(c)		Liens for taxes, assessments and other governmental charges or levies not yet delinquent or which are being contested in good faith by appropriate proceedings;
	(d)		Survey exceptions, encumbrances, easements or reservations of or with respect to, or rights of others for or with respect to, licenses, rights-of-way, sewers, electric and other utility lines and usages, telegraph and telephone lines, pipelines, surface use, operation of equipment, permits, servitudes and other similar matters, or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

	(e)		Liens existing on or provided for under the terms of agreements existing on the the Issue Date (including, without limitation, under the Credit Agreements);
	(f)		Liens on property at the time Block or any of its Subsidiaries acquired the property or the entity owning such property, including any acquisition by means of a merger or consolidation with or into the Company; provided, however, that any such Lien may not extend to any other property owned by Block or any of its Subsidiaries;
	(g)		Liens on any Principal Property, or any shares of stock or Indebtedness of any Subsidiary, that Block or any Subsidiary acquires (including by way of merger or consolidation) after the date of the Indenture that are created contemporaneously with such acquisition, or within 24 months thereafter, to secure or provide for the payment or financing of any part of the purchase price thereof;
	(h)		Liens arising from, or in connection with, any securitization, sale or other transfer, or any financing, involving loans, servicing assets, securities, receivables or other financial assets (or, in each case, portions thereof, or participations therein) and/or, in each case, related rights and interests;
	(i)		Liens securing a Hedging Obligation so long as such Hedging Obligation is of the type customarily entered into for the purpose of limiting risk;
	(j)		Purchase Money Liens;
	(k)		Liens securing only Indebtedness of a Subsidiary of Block to Block or one or more wholly owned Subsidiaries of Block;
	(l)		Liens on any property to secure Indebtedness incurred in connection with the construction, installation or financing of pollution control or abatement facilities or other forms of industrial revenue bond financing or Indebtedness issued or Guaranteed by the United States, any state or any department, agency or instrumentality thereof;
	(m)		Government Contract Liens;
	(n)		Liens securing Indebtedness of joint ventures in which Block or a Subsidiary has an interest to the extent such Liens are on property or assets of such joint ventures;
	(o)		Liens arising in connection with payables to brokers and dealers in the ordinary course of business;
	(p)		Liens arising in connection with deposits and other liabilities incurred by banking and/or other financial services activities in the ordinary course of business;

	(q)		Banker’s Liens, rights of setoff and other similar Liens existing solely with respect to bank accounts maintained by Block and its Subsidiaries, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained; provided that, unless the Liens are non-consensual and arise by operation of law, the Liens shall not secure (either directly or indirectly) the repayment of any Indebtedness;
	(r)		Liens resulting from the deposit of funds or evidences of Indebtedness in trust for the purpose of defeasing Indebtedness of Block or any of its Subsidiaries;
	(s)		legal or equitable encumbrances deemed to exist by reason of negative pledges or the existence of any litigation or other legal proceeding and any related lis pendens filing (excluding any attachment prior to judgment lien or attachment lien in aid of execution on a judgment);
	(t)		any attachment Lien being contested in good faith and by proceedings promptly initiated and diligently conducted, unless the attachment giving rise thereto shall not, within sixty days after the entry thereof, have been discharged or fully bonded or shall not have been discharged within sixty days after the termination of any such bond;
	(u)		any judgment Lien, unless the judgment it secures shall not, within sixty days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within sixty days after the expiration of any such stay;
	(v)		Liens to banks arising from the issuance of letters of credit issued by such banks;
	(w)		Rights of a common owner of any interest in property held by such Person;
	(x)		Any defects, irregularities or deficiencies in title to easements, rights-of-way or other properties which do not in the aggregate materially adversely affect Block and its Subsidiaries taken as a whole; and
	(y)		Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements), as a whole, or in part, of any indebtedness secured by any Lien referred to in the foregoing clauses (e) through (n); provided, however, that (i) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property) and (ii) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the indebtedness described under clauses (e) through (j) at the time the original Lien became a Permitted Lien under this Indenture and (B) an amount

necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement.

(18)		Section 4.08 of the Indenture (Maintenance of Properties) shall not be applicable to the Notes.
(19)		The only Events of Default with respect to the Notes shall be those listed in clauses (a) through (h) of Section 6.01 of the Indenture.
(20)		Section 10.01 of the Indenture with respect to the Notes shall be replaced with the following:

Consolidations and Mergers of the Company. Neither Block nor the Company shall consolidate with or merge with or into any Person, or convey, transfer or lease all or substantially all the assets of Block on a consolidated basis, unless:

	(i)		either (a) the Company or Block shall be the continuing Person in the case of a merger or (b) the resulting, surviving or transferee entity if other than the Company (the “Successor Company”) shall be a Person organized and existing under the laws of the United States, any State thereof or the District of Columbia and expressly assumes, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company and Block under the Notes according to their tenor, and this Indenture;
	(ii)		immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Subsidiary of Block as a result of such transaction as having been incurred by the Successor Company or such Subsidiary at the time of such transaction), no Default or Event of Default would occur or be continuing; and
	(iii)		Block shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and each related supplemental Indenture, if any, complies with this Indenture.

(21)		The Notes shall be subject to Article XI of the Indenture (“Satisfaction and Discharge of Indenture; Defeasance; Unclaimed Moneys”).
(22)		The Notes will be issued in registered form, in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
(23)		The initial public offering price of the Notes is 99.896% of the principal amount thereof, plus accrued interest, if any, from January 11, 2008;
(24)		The price to be received by the Company from the Underwriters pursuant to the Underwriting Agreement dated January 8, 2008 among the Company, Block, Merrill

		Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and HSBC Securities (USA) Inc. for the Notes shall be 99.296% of the principal amount thereof;
(25)		In case of any conflict between this Certificate and the Notes in the form referred to in paragraph (7), the Notes shall control.

[signature page follows]

     IN WITNESS WHEREOF, I have signed my name as of this 11th day of January, 2008.

By: /s/ Becky S. Shulman                              
Name: Becky S. Shulman
Title: Senior Vice President and Treasurer

By: /s/ Bret G. Wilson                              
Name: Bret G. Wilson
Title: Secretary

Exhibit A

[Form of Note]

EXHIBIT 4.2

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

Number R-

CUSIP 093662 AD6

Block Financial LLC

7.875% Note 2013

Rate of Interest		Maturity Date		Original Issue Date
7.875%		January 15, 2013		January 11, 2008

     BLOCK FINANCIAL LLC, a limited liability company duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of                     , at the office or agency of the Company in the Borough of Manhattan, The City and State of New York, on January 15, 2013, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, at the rate of 7.875% per annum (the “Original Interest Rate”), from the date hereof or from the most recent date to which interest has been paid or duly provided for, semi-annually on January 15th and July 15th of each year and at maturity, on said principal sum at said office or agency, in like coin or currency, commencing on July 15, 2008.

     The interest so payable on any January 15 or July 15 will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note is registered at the close of business on such December 31 or June 30, as the case may be, next preceding such January 15 or July 15, unless the Company shall default in the payment of interest due on such interest payment date, in which case such defaulted interest, at the option of the Company, may be paid to the person in whose name this Note is registered at the close of business on a special record date for the payment of such defaulted interest established by notice to the registered Holders of Notes not less than ten days preceding such special record date or may be paid in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed. Payment of interest may, at the option of the Company, be made by check mailed to the registered address of the person entitled thereto.

     This Note is one of a duly authorized issue of unsecured Notes, notes or other evidences of indebtedness of the Company (hereinafter called the “Securities”), of the series hereinafter specified, all issued or to be issued under an indenture dated as of October 20, 1997 (hereinafter called the “Indenture”), among the Company, H&R Block, Inc. (“Guarantor”) and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company) (the “Trustee”), as supplemented by that certain First Supplemental Indenture, dated as of April 18, 2000, among the Company, Guarantor, the Trustee and The

Bank of New York, as separate trustee under the Indenture in respect of the Company’s 8.50% Notes due 2007, to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the respective rights and duties thereunder of the Trustee, Bank of New York, the Company, the Guarantor and the Holders of the Securities. The Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest at different rates, may have different conversion prices (if any), may be subject to different redemption provisions, may be subject to different sinking, purchase or analogous funds, may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. This Note is one of a series designated as the 7.875% Notes due 2013 of the Company (hereinafter called the “Notes”) issued under the Indenture.

     Reference is made to the further provisions of this Note set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Trustee under the Indenture referred to on the reverse hereof.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Dated: January 11, 2008

This is one of the Notes referred to in the within-mentioned Indenture.

DEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE

By DEUTSCHE BANK NATIONAL TRUST COMPANY

By
Name:
Title:

BLOCK FINANCIAL LLC
7.875% Notes 2013

     The Notes shall be redeemable in whole or in part at the option of the Company at any time, at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed, plus accrued interest to the redemption date, or (ii) the sum of the present values of the remaining principal amount and scheduled payments of interest on the Notes to be redeemed (not including any portion of payments of interest accrued as of the redemption date) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus seventy (70) basis points, plus accrued interest to the redemption date.

          “Treasury Rate” means, with respect to any redemption date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated on the third business day preceding the redemption date, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.

          “Comparable Treasury Issue” means the United States Treasury security selected by the Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.

          “Comparable Treasury Price” means, with respect to any redemption date, (i) the average of the Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations or (ii) if the trustee obtains fewer than five Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received.

          “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the trustee after consultation with the Company.

          “Reference Treasury Dealer” means (a) each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and HSBC Securities (USA) Inc. and their respective successors, unless any of them ceases to be a primary U.S. government securities dealer in New York City (a "Primary Treasury Dealer"), in which case the issuer shall substitute another Primary Treasury Dealer, and (b) any other Primary Treasury Dealer selected by the Company.

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by that Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding that redemption date.

     Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed. Notices of redemption may not be conditional. Unless the Company defaults in payment of the redemption price on and after the redemption date, interest will cease to accrue on the Notes or portions thereof called for redemption.

     Upon the occurrence of a Change of Control Triggering Event (as defined herein), unless the Company has exercised its right to redeem the Notes, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess

thereof) of such Holder’s Notes as provided herein (the “Change of Control Offer”) at a purchase price in cash equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest, if any, on such Notes to the date of purchase (the “Change of Control Payment”).

     Within 30 days following any Change of Control Triggering Event, the Company shall send, by first class mail, a notice to each Holder of Notes, with a written copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice shall state:

(i) a description of the transaction or transactions that constitute such Change of Control Triggering Event;

(ii) that the Change of Control Offer is being made pursuant to provisions hereof and that all Notes validly tendered will be accepted for payment;

(iii) the Change of Control Payment and the date on which the change of control payment will be made (“Change of Control Payment Date”), which shall be a Business Day that is no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law;

(iv) that any Note not tendered will continue to accrue interest;

(v) that any Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on and after the Change of Control Payment Date unless the Company shall default in the Change of Control Payment and the only remaining right of the Holder thereof is to receive the Change of Control Payment upon surrender of such Note to the Paying Agent;

(vi) that Holders of the Notes electing to have a portion of a Note purchased pursuant to a Change of Control Offer may only elect to have such Note purchased in a principal amount of $2,000 or integral multiples of $1,000 in excess thereof;

(vii) that if a Holder of Note elects to have such Notes purchased pursuant to the Change of Control Offer it will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date;

(viii) that a Holder of Notes will be entitled to withdraw its election if the Company receives, not later than the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Notes such Holder delivered for purchase, and a statement that such Holder is withdrawing its election to have such Notes purchased; and

(ix) that if Notes are purchased only in part a new Note of the same type will be issued in a principal amount equal to the unpurchased portion of the Notes surrendered.

     On the Change of Control Payment Date, the Company shall, to the extent lawful, (i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof properly tendered and (iii) deliver or cause to be delivered to the Trustee for cancellation the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent shall

promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee, upon receipt of an order from the Company, shall promptly authenticate and mail (or cause to be transferred by book entry) to such Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered by such Holder, if any, in denominations as set forth in the Indenture.

     The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control Triggering Event provisions hereof, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this paragraph by virtue of such conflicts.

     For all purposes hereof:

     “Below Investment Grade Rating Event” means the ratings on the Notes are lowered by each of the Rating Agencies and the Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of the Change of Control (which 60-day period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by any of the Rating Agencies); provided that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Triggering Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee or the Company in writing at the Trustee’s or the Company’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).

     “Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participation or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock and limited liability or partnership interests (whether general or limited), but excluding any debt securities convertible into such equity.

     “Change of Control” means the occurrence of any of the following:

(a) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Guarantor’s properties or assets and of the Guarantor’s subsidiaries’ properties or assets taken as a whole to any Person or group of related “persons” (as that term is used in Section 13(d)(3) of the Exchange Act (a “Group”) other than the Guarantor or one of the Guarantor’s subsidiaries;

(b) the adoption of a plan relating to liquidation or dissolution of the Guarantor;

(c) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any Person or Group becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Company’s or the Guarantor’s Voting Stock; or

(d) the first day on which a majority of the members of the Guarantor’s Board of Directors are not Continuing Directors.

     Notwithstanding the foregoing, a transaction will not be considered to be a Change of Control if (1) the Guarantor becomes a direct or indirect wholly owned subsidiary of a holding company and (2) immediately following that transaction, (A) the direct or indirect Holders of the Voting Stock of the holding company are substantially the same as the Holders of the Guarantor’s Voting Stock immediately prior to that transaction or (B) no Person or Group is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of the holding company.

     “Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

     “Continuing Director” means, as of any date of determination, any member of the Guarantor’s Board of Directors who (1) was a member of the Guarantor’s Board of Directors on the date of the issuance of the Notes or (2) was nominated for election, elected or appointed to the Guarantor’s Board of Directors with the approval of a majority of the Continuing Directors who were members of the Guarantor’s Board of Directors at the time of such nomination, election or appointment (either by a specific vote or by approval of the Guarantor’s proxy statement in which such member was named as a nominee for election as a director).

     “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P.

     “Moody’s” means Moody’s Investors Service, Inc. or its successor.

     “Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision thereof or any other entity, and includes a “person” as used in Section 13(d)(3) of the Exchange Act.

     “Rating Agencies” means (1) each of Moody’s and S&P and (2) if either of Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s and the Guarantor’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Guarantor (as certified by a resolution of the Guarantor’s Board of Directors) as a replacement agency for Moody’s or S&P or either of them, as the case may be.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or its successor.

     “Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors, managers or trustees, as applicable.

     The Notes will not be entitled to any sinking fund.

     In case an Event of Default with respect to the Notes, as defined in the Indenture, shall have occurred and be continuing, the principal hereof together with interest accrued thereon, if any, may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

     The interest rate payable on the Notes shall be subject to adjustments from time to time if either Moody’s or S&P downgrades (or subsequently upgrades) the debt rating assigned to the Notes, as set forth below.

     If the rating from Moody’s of the Notes is decreased to a rating set forth in the immediately following table, the interest rate on the Notes shall increase from the Original Interest Rate by the percentage set forth opposite that rating:

Rating		Percentage
Ba1			0.25	%
Ba2			0.50	%
Ba3			0.75	%
B1 or below			1.00	%

     If the rating from S&P of the Notes is decreased to a rating set forth in the immediately following table, the interest rate on the Notes shall increase from the Original Interest Rate by the percentage set forth opposite that rating:

Rating		Percentage
BB+			0.25	%
BB			0.50	%
BB-			0.75	%
B+ or below			1.00	%

     Notwithstanding the foregoing, if at any time the interest rate on the Notes has been adjusted upward and either Moody’s or S&P, as the case may be, subsequently increases its rating of the Notes to any of the threshold ratings set forth in the tables above, the interest rate on the Notes shall be decreased such that the interest rate for the Notes equals the Original Interest Rate plus the percentages set forth opposite the ratings from the tables above in effect immediately following the increase. If Moody’s subsequently increases its rating of the Notes to Baa3 or higher and S&P increases its rating to BBB- or higher the interest rate on the Notes shall be decreased to the Original Interest Rate.

     Each adjustment required by any decrease or increase in a rating set forth above, whether occasioned by the action of Moody’s or S&P, shall be made independent of any and all other adjustments. In no event shall (1) the interest rate for the Notes be reduced to below the Original Interest Rate or (2) the total increase in the interest rate on the Notes exceed 2.00% above the Original Interest Rate.

     If either Moody’s or S&P ceases to provide a rating of the Notes, any subsequent increase or decrease in the interest rate of the Notes necessitated by a reduction or increase in the rating by the agency continuing to provide the rating shall be twice the percentage set forth in the applicable table above. No adjustments in the interest rate of the Notes shall be made solely as a result of either Moody’s or S&P ceasing to provide a rating. If both Moody’s and S&P cease to provide a rating of the Notes, the

interest rate on the Notes shall increase to, or remain at, as the case may be, 2.00% above the Original Interest Rate.

     Any interest rate increase or decrease described above shall take effect from the first day of the interest period during which a rating change requires an adjustment in the interest rate.

     The interest rate on the Notes shall permanently cease to be subject to any adjustment described above (notwithstanding any subsequent decrease in the ratings by either or both rating agencies) and, if applicable, shall be decreased to the interest rate payable on the Notes on the date of their issuance, if the Notes become rated A3 and BBB or higher by Moody’s and S&P, respectively (or one of these ratings if only rated by one rating agency), with a stable or positive outlook by each of the rating agencies.

     The Indenture contains provisions permitting the Company, the Guarantor and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities at the time outstanding of all series to be affected (acting as one class) to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the Holders of the Notes; provided, however, that no such supplemental indenture shall, among other things, (i) reduce the percentage in principal amount of Notes whose Holders must consent to an amendment; (ii) reduce the rate of or extend the time for payment of interest on any Notes; (iii) reduce the principal of or extend the Stated Maturity of any Notes; (iv) make any Notes payable in Currency other than that stated in the Notes; (v) release any security that may have been granted in respect of the Notes; or (vi) make any change in any of the foregoing provisions. It is also provided in the Indenture that the Holders of a majority in aggregate principal amount of the Securities of a series at the time outstanding may on behalf of the Holders of all the Securities of such series waive any past default under the Indenture with respect to such series and its consequences, except a default in the payment of the principal of, premium, if any, or interest, if any, on any Security of such series or in respect of a covenant or provision which cannot be modified without the consent of the Holder of each outstanding Security of the series affected. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, if any, and interest on this Note at the place, at the respective times, at the rate and in the coin or currency herein prescribed.

     The Indenture permits the Company to discharge its obligations with respect to the Notes on the 91st day following the satisfaction of the conditions set forth in the Indenture, which include the deposit with the Trustee of money or U.S. Government Obligations or a combination thereof sufficient to pay and discharge each installment of principal of (including premium, if any, on) and interest, if any, on the outstanding Notes.

     If the Company shall, in accordance with Section 10.01 of the Indenture, consolidate with or merge into any other corporation or if the Company or the Guarantor convey or transfer substantially all of the properties and assets of the Guarantor, on a consolidated basis to any Person, the successor shall succeed to, and be substituted for, the Person named as the “Company” on the face of this Note, all on the terms set forth in the Indenture.

     The Notes are issuable in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000. In the manner and subject to the limitations provided in the Indenture, but

without the payment of any service charge, Notes may be exchanged for an equal aggregate principal amount of Notes of other authorized denominations at the office or agency of the Company maintained for such purpose in the Borough of Manhattan, The City and State of New York.

     Upon due presentation for registration of transfer of this Note at the office or agency of the Company for such registration in the Borough of Manhattan, The City and State of New York, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange herefor, subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith.

     The Note is subject to redemption in whole or in part at any time at the option of the Company as provided in the Indenture.

     Prior to due presentment for registration of transfer of this Note, the Company, the Trustee and any agent of the Company or the Trustee may deem and treat the registered Holder hereof as the absolute owner of this Note (whether or not this Note shall be overdue) for the purpose of receiving payment of the principal of, premium, if any, and interest on this Note, as herein provided, and for all other purposes, and neither the Company nor the Trustee nor any agent of the Company or the Trustee shall be affected by any notice of the contrary. All payments made to or upon the order of such registered Holder shall, to the extent of the sum or sums paid, effectually satisfy and discharge liability for moneys payable on this Note.

     No recourse for the payment of the principal of, premium, if any, or interest on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

     Unless otherwise defined in this Note, all terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     H&R BLOCK, INC., a Missouri corporation (the “Guarantor”, which term includes any successor under the Indenture (the “Indenture”) referred to in the Debt Security on which this notation is endorsed) has unconditionally guaranteed, pursuant to the terms of the Guarantees contained in Article XIII of the Indenture, the due and punctual payment of the principal of and any premium and interest on this Debt Security, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, in accordance with the terms of this Debt Security and the Indenture.

     The obligations of the Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantees and the Indenture are expressly set forth in Article XIII of the Indenture, and reference is hereby made to such Article and Indenture for the precise terms of the Guarantees.

     The Guarantees shall not be valid or obligatory for any purpose until the certificate of authentication on the Debt Security upon which this notation of the Guarantees is endorsed shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized signatories.

ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations

TEN COM — as tenants in common
TEN ENT — as tenants by the entireties
JT TEN — as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT —				Custodian
		(Cust)				(Minor)

Under Uniform Gifts to Minors Act
		(State)

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto

[PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]		[PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE, OF ASSIGNEE]
Within Note and all rights thereunder, hereby irrevocably constituting and appointing such person attorney to transfer such note on the books of the Issuer, with full power of substitution in the premises.
DATE		SIGNATURE

NOTICE: The signature must correspond with the name as written upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever.

OPTION OF HOLDER TO ELECT PURCHASE

     If the undersigned wants to elect to have this Note purchased by the Company pursuant to the provisions hereof, check the box below:

     o

     If the undersigned wants to elect to have only part of this Note purchased by the Company pursuant to the provisions hereof, state the amount the undersigned elects to have purchased:

     $ 

Dated:
Signature:
Tax Identification Number:
Signature guarantee:

     NOTE: The signature to this assignment must correspond exactly with the name as written upon the face of the within Global Note in every particular without alteration or enlargement or any change whatsoever and must be guaranteed by a commercial bank or trust company having its principal office or correspondent in The City of New York or by a member of the New York Stock Exchange.

EXHIBIT 5.1

 

Block Financial LLC
H&R Block, Inc.
January 11, 2008
Page 2

	d.		Officers’ Certificate of the Company establishing the terms of the Notes (the “Officers’ Certificate”, and the Original Indenture, as supplemented or amended by the First Supplemental Indenture and the Officers’ Certificate is referred to herein as the “Indenture”);
	e.		two global notes representing the Notes and the Guarantee endorsed on the Notes;
	f.		the Registration Statement on Form S-3 (File No. 333-118020) filed with the Securities and Exchange Commission on August 6, 2004 (the “Registration Statement”);
	g.		the prospectus of the Company and the Guarantor dated October 21, 2004 (the “Base Prospectus”);
	h.		the preliminary prospectus supplement of the Company dated January 8, 2008 (together with the Base Prospectus, the “Preliminary Prospectus”);
	i.		the prospectus supplement of the Company dated January 8, 2008 (the “Prospectus Supplement”, and together with the Base Prospectus, the “Prospectus”);
	j.		each Issuer Free Writing Prospectus specified in Schedule C to the Underwriting Agreement;
	k.		the certificate of formation and operating agreement of the Company, as certified by the Secretary of the Company;
	l.		the articles of incorporation and by-laws (both, as amended and/or restated) of the Guarantor, as certified by the Secretary of the Guarantor;
	m.		the resolutions adopted by the sole member of the Company and the Board of Directors of the Guarantor relating to the offer and sale of the Notes by the Company and the guarantee thereof by the Guarantor as certified by the Secretary of the Company and the Secretary of the Guarantor, respectively; and
	n.		the resolutions adopted by the Pricing Committee of the Company on January 8, 2008, as certified by the Secretary of the Company.

     We express no opinion as to matters under or involving the laws of any jurisdiction other than the Delaware Limited Liability Company Act, the General Corporation Law of Delaware, the corporate laws of the State of Missouri, the laws of the State of New York, and the federal law of the United States of America.

Block Financial LLC
H&R Block, Inc.
January 11, 2008
Page 3

     For purposes of the opinions expressed below, we have assumed (i) the authenticity of original documents and the genuineness of all signatures; (ii) the conformity to the originals of all documents submitted to us as copies; (iii) the due authorization, execution and delivery of all documents by all parties and the validity, binding effect and enforceability thereof (other than the authorization, execution and delivery of documents by the Company or the Guarantor); (iv) the truth, accuracy, and completeness of the information, representations and warranties contained in the records, documents, instruments and certificates we have reviewed; and (v) all Notes will be issued and sold in compliance with applicable federal and state securities laws and in the manner stated in the Registration Statement and the Prospectus Supplement.

     Our opinions below that any document is valid, binding or enforceable is qualified as to: (i) the effect of applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar federal or state laws generally affecting the rights of creditors or secured parties; (ii) rights to indemnification and contribution, which may be limited by applicable law, public policy or equitable principles, and exculpatory provisions and waivers of the benefits of statutory provisions, which may be limited on public policy grounds; and (iii) the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, and the possible unavailability of specific performance or injunctive relief and limitation of rights of acceleration, regardless of whether such enforceability is considered in a proceeding in equity or at law.

     Based upon the foregoing and subject to the limitations, qualifications, and exceptions set forth herein, we are of the opinion that:

     1. the Notes have been duly authorized by all necessary corporate action on the part of the Company and the Guarantee has been duly authorized by all necessary corporate action on the part of the Guarantor; and

     2. the Notes and the Guarantee constitute valid and legally binding obligations of the Company and the Guarantor, respectively, enforceable in accordance with their terms.

     We consent to your filing this opinion letter as an exhibit to the Current Report on Form 8-K and to the reference to our firm contained under the heading “Legal Matters” in the Prospectus constituting a part of the Registration Statement. This consent is not to be construed as an admission that we are a person whose consent is required to be filed with the Registration Statement under the provisions of the Securities Act of 1933, as amended. This opinion letter is rendered solely for your benefit in connection with the above matter and may not be relied upon in any manner by any other person or entity without our express written consent.

EXHIBIT 12.1

H&R BLOCK
Computation of Ratio of Earnings to Fixed Charges
(Amounts in thousands)

		10/31/07				2007				2006				2005				2004				2003
Pretax income (loss) from continuing operations before change in accounting principle		$	(407,316	)		$	635,798			$	510,482			$	527,613			$	459,570			$	192,106
FIXED CHARGES:
Interest expense			27,333				105,393				76,367				82,311				81,672				88,784
Interest paid on deposits			28,039				27,475				—				—				—				—
Interest portion of net rent expense (a)			46,874				106,063				100,606				81,386				72,607				65,528
Total fixed charges			102,246				238,931				176,973				163,697				154,279				154,312
Earnings before income taxes and fixed charges		$	(305,070	)		$	874,729			$	687,455			$	691,310			$	613,849			$	346,418
Ratio of earnings to fixed charges:
Including interest paid on deposits (a)			—				3.7				3.9				4.2				4.0				2.2
Excluding interest paid on deposits (b)			—				4.1				3.9				4.2				4.0				2.2

EXHIBIT 12.2

BLOCK FINANCIAL CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Amounts in thousands)

		10/31/07				2007				2006				2005				2004				2003
Pretax income (loss) before change in accounting principle		$	(6,245	)		$	272,175			$	175,087			$	64,901			$	(24,675	)		$	(64,752	)
FIXED CHARGES:
Interest expense			26,906				63,039				76,504				79,662				43,744				59,065
Interest paid on deposits			28,039				27,475				—				—				—				—
Interest portion of net rent expense (a)			2,603				6,502				6,757				5,426				3,283				2,257
Total fixed charges			57,548				97,016				83,261				85,088				47,027				61,322
Earnings before income taxes and fixed charges		$	51,303			$	369,191			$	258,348			$	149,989			$	22,352			$	(3,430	)
Ratio of earnings to fixed charges:
Including interest paid on deposits (a)			—				3.8				3.1				1.8				—				—
Excluding interest paid on deposits (b)			1.7				5.3				3.1				1.8				—				—